Internal analyses conducted by the parties before the meeting revealed that such a deal would expand the bilateral trade and economic activity between the two countries. The joint feasibility check is scheduled to be completed within a year and its results will serve as the basis for future negotiations between the parties.
"Trade between Israel and China currently stands at some $8 billion," Minister Bennett said Monday. "We expect the agreement to significantly increase the volume of trade and see more small and medium-sized Israeli companies integrating into the bilateral economic activity with China."
The possibility of free trade relations between Israel and China was first raised in a meeting between former Finance Minister Yuval Steinitz and his Chinese counterpart more than two years ago.
Israel has similar agreements with many countries: The United States, Canada, Mexico, 27 European Union member states, four other European countries (Iceland, Norway, Switzerland and Lichtenstein), South American countries (Brazil, Uruguay, Paraguay and Argentina), as well as limited deals with Jordan and Egypt.
Each of these agreements eliminates tariffs and import quotas on most products brought by Israeli companies into the aforementioned countries. Israel, on its part, permits duty-free imports of products from these countries.
The agreements apply to all products, excluding those whose domestic production is protected by the State, mainly basic food products (milk, bread and eggs).
Goal: Asia, Latin America
The Israeli government has been attempting to advance free trade agreements with countries like China and India for several years now. Such deals are in accordance with the general policy aimed at diverting Israeli exports from North America and European countries to the Far East and Latin America.
Traditionally, the Israeli economy exports mostly to Europe and North America due to the shared cultural background facilitating the creation of business relations and strong diplomatic ties with the US and European governments.
The Economy Ministry currently uses several measures to promote economic relations with China, including a fund financially encouraging Israeli companies to station marketing representatives in China, thus shortening their entrance to this major market.
In addition, the Economy Ministry has four commercial attachés in China, who serve as the front gate to the Chinese market for exporters and manufacturers from Israel.